SPH net profit down 17.5% to $265.3 million in FY2016

Singapore Press Holdings (SPH) has reported a 17.5 per cent drop in net profit to $265.3 million for its 2016 financial year amid a continued slowdown in the conglomerate’s core media business.

The results for the year ended 31 August 2016 included impairment charges of $28.4 million due mainly to the magazine business, SPH said in a statement on Friday (14 October).

An impairment charge of $9.1 million was also recognised in the previous financial year. Excluding the impairment charges, net profit would have fallen by 11.2 per cent.

Group operating revenue fell 4.5 per cent to $1.1 billion amid the economic slowdown and structural challenges in the core business.

The media business reported a 7.6 per cent decline in revenue to $834.2 million. Advertisement revenue was down 9.2 per cent, or $61.5 million, while circulation revenue fell 3 per cent, or $5.3 million.

SPH cited several factors that may affect its business in the near term, including its media segment. “Newsprint prices are expected to strengthen but remain dependent on the degree of market balance between supply and demand,” it said.

SPH began a comprehensive review of its media business in the previous quarter.

Alan Chan, SPH CEO, said, “This exercise is on-going. We will continue to focus on our drive to transform and sustain the media business whilst pursuing growth opportunities.”

The decline in the media business was offset by the property segment, which saw a 4.6 per cent rise in revenue to $241.3 million.

Revenue from the group’s other businesses grew 11.4 per cent to $48.8 million due to gains in the exhibitions and online classifieds businesses.

As at end-August, the headcount at SPH was 4,182, down 1.3 per cent from a year earlier. Staff costs fell 2.4 per cent to $362.6 million over the period.

Chan said, “FY2016 has been a challenging year marked by a very tough operating environment. Looking ahead, market conditions are expected to remain difficult in view of the uncertain economic outlook and the continuing disruption of the media industry.”    

Media reports of planned restructuring at SPH

SPH’s results came amid talk that it plans to implement group-wide restructuring measures.

On Wednesday, Yahoo Singapore and Bloomberg reported about plans by SPH to trim its workforce by up to 10 per cent and to merge two tabloids, The New Paper and MyPaper.

In response to queries from Yahoo Singapore on the proposed changes, an SPH spokesman said, “We do not comment on speculation.”

Yahoo Singapore understands that representatives from the Creative Media and Publishing Union (CMPU), which represents employees including those from SPH, met senior management of SPH on Friday evening.

In a statement to Yahoo Singapore on Friday, Mindy Kwok, CMPU General Secretary, said, “When we (CMPU) saw the online news (about the planned restructuring), we immediately engaged the management to seek clarifications. The management shared that it was speculative reporting and gave assurance that they will work closely with the union if there are indeed such plans.”